What would be the world's biggest ever securitization an $8 billion transaction intended to compensate Spain's electricity providers for competition transition costs is still possible, according to bankers working on the deal, despite an announcement from the European Union's competition authorities suggesting that such a deal could be illegal.

The intended transaction, which is being worked on by Morgan Stanley Dean Witter, Banco Bilbao Vizcaya and Banco Centro Hispano, would securitize a levy on individual consumer's electricity bills. The cash raised would then be paid to Spanish electricity companies in compensation for investments made before the introduction of more competition into the industry.

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